decline) and in the worst possible position if we do
so under Chinene pressure.
19. Our Negotiating Position. The weakness of our
negotiating position is that we b ve many hostages
in Hong Kong in terms of people and noants, a
subotential proportion of which shall find it very
difficult (if not impossible) to move. We ourselves
have no means of bringing substantial pressure to besp
on Chine.
de with her is not significant;
Cur
porto are neither vital nor irreplaceable
* $80.ITIO@
OUT
om other
Our military espability (including nuclear
capability )could hardly be a factor in a situation in
which wo were trying to get China to the conference
table particularly since China's assessmont lo
probably that we would not use it even in defence of
Hong Kong against a military take-over.
20. The strength of our nogotiating position llas in
the seonomic value of Hong Kong to Chins se a soures
of foreign exchange. Our strongest onrd vould be the
possibility of handing over a buoynat Hong Kong economy
for which we could hold out continuing prospecte
as an exrner of foreign exchange in Chinase hende.
postulated & very different attitude to trade with
Chinn on the part of the U.S.A. (which tekea 36 $
of all Hong Kong's exports) and some understanding with
our other Western allice and friends who trade with
China and Hong Kong that they would not regard the
change of aduinistration as an opportunity to reduce
drastically or cut off altogether their trade with the
latior. If we cannot make use of these strong cards in
the Mald of Hong Kong's trade then we shall be
roduced to such economia counters as accos to our ownI
for Hong Kong products and the disposal of
Hong Kong aasate held in London.
/21
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